Relief from Sanctions Test Confirmed

In a recent judgment, His Honour Deemster Needham reconfirmed the test to be applied in the Isle of Man when a party seeks or requires relief from sanctions pursuant to Rule 2.59 of the Rules of the High Court of Justice 2009 (the Rules).

In Wozniak v Thomson (ORD25/0002 – judgment dated 21 November 2025), the Isle of Man High Court confirmed that the test to be applied is the three stage test out by Lord Dyson in Denton v T H White Ltd [2014] EWCA Civ 906 (the Denton Test). The Denton Test had previously been applied by the Staff of Government Division (the Isle of Man’s Court of Appeal) in Montpelier Tax Planning (Isle of Man) Ltd (in liq) v Jones (No2) 2015 MLR N8. In particular, paragraph 24 of Lord Dyson’s judgment in Denton was cited with approval:-

"24. A judge should address an application for relief from sanctions in three stages. The first stage is to identify and assess the seriousness and significance of the ‘failure to comply with any rule, practice direction or court order’ which engages rule 3.9(1). If the breach is neither serious nor significant, the court is unlikely to need to spend much time on the second and third stages. The second stage is to consider why the default occurred. The third stage is to evaluate ‘all the circumstances of the case, so as to enable [the court] to deal justly with the application …"

In Wozniak, the Defendant argued that the Claimant’s particulars of claim were in breach of Rules 8.6, 8.7, 8.68 and 8.69(1) because they were unsigned and did not include a statement of truth. The Defendant therefore sought to strike out the Claimant’s claim. The Claimant had not filed a separate application notice seeking relief from sanctions.

Although unwilling to strike out the claim, His Honour Deemster Needham found that the omissions of a signature and a statement of truth in the Claimant’s particulars of claim did constitute a breach of Rule 8.68(1).

As a result, Deemster Needham turned to the Denton Test as to the question of relief from sanctions.

In assessing the seriousness and significance of the breach in question, His Honour stated (at paragraph 18) that “the breach is neither serious nor particularly significant. It is not something that significantly prejudices the Defendant… The evidential significance of a lack of a statement of truth is not great and any adverse consequence of a lack of verification…is only detrimental to the Claimant rather than the Defendant.”‍

Upon establishing the inconsequential nature of the breach in question (the first stage in the Denton Test), His Honour did not appear to consider the second and third stages of the Denton Test needed to be addressed. This is consistent with the guidance provided by Lord Dyson in Denton:

"If the breach is neither serious nor significant, the court is unlikely to need to spend much time on the second and third stages."

As a result, Deemster Needham ordered the Claimant to verify its particulars of claim with a signed and dated statement of truth.

This case serves as a reminder of the existence and importance of proper procedure when conducting litigation in the Isle of Man. Compliance with the Rules is always required, and any breaches, no matter how insignificant, will be considered and dealt with appropriately, most often by reference to the Denton Test.

For information on how Maher Law’s specialist dispute resolution team can assist in complex offshore litigation, please contact Tom Maher at tom@maher.im.

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